FCC Kills Charter Merger Condition That Would Have Forced ISPs To Compete

from the let's-ignore-the-obvious dept

While FCC boss Ajit Pai has repeatedly claimed his top priority while running the FCC is eliminating the digital divide, his behavior in just the first few months of his term has made that claim utterly and indisuptably laughable. It doesn't take a sociology degree to realize that Pai's recent decisions to protect prison phone monopolies, protect the cable box monopoly, undermine efforts to bring broadband to the poor and dismantle net neutrality solely help one particular constituency: the telecom sector's biggest, wealthiest, and most powerful providers.

And while repealing a previous FCC's policies isn't entirely new or unexpected (especially from somebody with Pai's extremely mono/duopoly friendly voting record), Pai has been pushing his purview even further. Last week the FCC boss announced that he'd even begun stripping away at the conditions attached to Charter's $79 billion acquisition of Time Warner Cable and Bright House Networks.

While the FCC has a history of relatively toothless merger conditions (often proposed by the companies themselves), Wheeler's FCC went a little further with Charter -- not only banning the company from imposing usage caps and overage fees for seven years, but requiring that Charter continue adhering to FCC net neutrality rules -- even if those rules are killed (something Pai has repeatedly promised to do). But the FCC also mandated that Charter Communications expand its broadband footprint to two million additional locations -- one million of which needed to be in areas already served by cable competitors.

Former FCC boss Tom Wheeler had argued that this "overbuild" condition would specifically impose added competition on those regions, "bringing innovation and new choices for consumers, and demonstrate the viability of one broadband provider overbuilding another." But small and large cable company lobbyists had spent months lobbying to have all of the conditions killed, going so far as to threaten to freeze broadband investment if the conditions weren't eliminated (you know you're in a non-competitive market when you labor under the illusion that you get to choose when to compete).

Quickly rushing to the aid of these companies before they faced the dreaded specter of additional competition, Pai's office announced that the agency would be retroactively killing the overbuild condition. This was, Pai insisted in an FCC statement, yet another shining example of the FCC boss's relentless dedication to helping "the public interest":

"My top priority is making sure that any American who wants high-speed Internet access is able to get it. Today, we take another step toward achieving that goal.

Last year, Charter Communications agreed to build broadband out to two million new customers as part of its merger with Time Warner Cable and Bright House Networks. Unfortunately, the FCC appended an “overbuild” condition to the order, requiring that half of those new locations be already served by another provider. Since these one million overbuilt deployments would be credited against the total, it would substantially reduce buildout to unserved areas. This is like telling two people you will buy them dinner, ordering two entrées, and then sending both to just one of your companions.

This condition was not and is not in the public interest, and it runs directly against the goal of promoting greater Internet access for all Americans.

So one, to believe Pai you'd have to ignore not only his entire voting record, but the fact that he just began dismantling an FCC program specifically designed to help bring broadband to the poor.

That said, people should also understand that large ISPs (and those that kneel in fealty to them) like to keep the focus on an ambiguous dedication to "closing the digital divide" because it ignores the real problem: high prices and limited competition. According to NTIA data, there are about 26 million households left in the U.S. that aren't connected to the internet. If you look closely at the breakdown of why these homes aren't connected, the top three reasons either involve these users not giving a damn about being connected, or not being able to afford connectivity due to cost:

Because these companies obviously don't want people focused on the lack of competition, you've perhaps noticed that Pai (and the large ISPs that adore him) avoid ever acknowledging that lack of competition -- and the resulting high prices -- are a problem. In fact, it's often comedic to watch how desperately many of these folks (including the lion's share of hired ISP policy mouthpieces and think tankers) try and avoid the subject. Instead, apparently, we get odd metaphors about dinner entrees that don't really make much coherent sense in context.

Of course, then, the overbuild condition was axed because it did the unspeakable: actually forced a handful of companies to compete. Granted this overall lack of competition is what lets these companies impose arbitrary and unnecessary usage caps and overage fees -- which are little more than glorified rate hikes. And cable lobbying groups like the NCTA have been lobbying the FCC to get rid of the conditions banning Charter caps as well (pdf).

All told, much like the man that appointed him, FCC boss Ajit Pai likes to try and obfuscate his almost mindless dedication to protecting large legacy companies with an utterly phoney dedication to the downtrodden. The Charter merger, approved under the Obama administration, was admittedly a bad deal that has already resulted in higher prices and even worse customer service for impacted customers. But eliminating these conditions only serves to make an already bad deal, even worse. And the pretense that it's being done out of a love of America's downtrodden only adds insult to injury.


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  • icon
    Ninja (profile), 6 Apr 2017 @ 5:17am

    Just like the possessive husband that beats his wife into the hospital but claims it's because he loves her. My ass. Pai is a dipshit who couldn't care less about anything other than his own interests. Much like Trump. They all claim they want to protect the poor, the people but they actually are disgusted by those lowly peasants, they just care about the "great america" (translate: rich. I'd add white and Christian but Pai is Indian-American so it would be weird).

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 6 Apr 2017 @ 6:59am

    Micro-Monopolies!

    This is the truth and history of the FCC!

    Yay regulation!

    This is why I want them destroyed, not reworked. But lets be honest here... no regulatory agency is going to do its job, because Americans do not require Congress to do its job.

    reply to this | link to this | view in chronology ]

    • identicon
      Wendy Cockcroft, 10 Apr 2017 @ 2:31am

      Re: Micro-Monopolies!

      The market is a regulatory agency ostensibly controlled by supply and demand but without a consumer counterweight you may find that it doesn't do its job any better than the government does.

      reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 6 Apr 2017 @ 7:13am

    in fairness to Pai (and this is probably the only time I'll say this) He also said something along the lines of "If we don't require them to overbuild Comcast specifically there's no point" which I think is a much better arguement.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 6 Apr 2017 @ 7:15am

    Why poor people and women who voted for a government run by ultra rich male conservatives would give 1 shit about them for anything I'll never understand. This administration is a good old boy setup I'll scratch your rich back, you make me richer in return. Fuck the poor and middle class.

    reply to this | link to this | view in chronology ]

    • icon
      jupiterkansas (profile), 6 Apr 2017 @ 7:21am

      Re:

      You talk like we have a choice.

      reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 6 Apr 2017 @ 7:31am

        Re: Re:

        You do, you just need to get enough of your fellow citizens to exercise it.

        Good luck on that though... like the Declaration of Independence states... "and accordingly all experience hath shewn that mankind are more disposed to suffer, while evils are sufferable than to right themselves by abolishing the forms to which they are accustomed."

        reply to this | link to this | view in chronology ]

        • icon
          jupiterkansas (profile), 6 Apr 2017 @ 8:40am

          Re: Re: Re:

          "You do, you just need to get enough of your fellow citizens to exercise it."

          That's not a choice.

          reply to this | link to this | view in chronology ]

          • identicon
            Wendy Cockcroft, 10 Apr 2017 @ 5:34am

            Re: Re: Re: Re:

            No, so we need to get on with it.

            Campaigning is the only way to get the job done; if you wait for your fellow citizens to wake the hell up you'll be waiting forever. Talk about it at work, talk about it at home, on social media... heck, even talking about it here at TD has an impact, however small. We need to be having conversations about this to change people's minds one at a time. If we don't do it no one else will.

            reply to this | link to this | view in chronology ]

    • icon
      Uriel-238 (profile), 6 Apr 2017 @ 4:46pm

      MINILUV has some explanations for it.

      My experience (which is mostly testimonial) is that the majority of those who voted for Trump did so because they felt so much hatred and antipathy for Clinton.

      They don't regard Trump's intentions or competence rather than he makes me feel better.

      Which is consistent with Trump's sales philosophy.

      reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 6 Apr 2017 @ 7:15am

    Why poor people and women who voted for a government run by ultra rich male conservatives would give 1 shit about them for anything I'll never understand. This administration is a good old boy setup I'll scratch your rich back, you make me richer in return. Fuck the poor and middle class.

    reply to this | link to this | view in chronology ]

  • icon
    DannyB (profile), 6 Apr 2017 @ 7:35am

    The FCC is doing this because

    The FCC needs to reduce competition because ISPs are in such a heavily competitive business. /sarc

    reply to this | link to this | view in chronology ]

  • icon
    TheResidentSkeptic (profile), 6 Apr 2017 @ 7:43am

    The math is the answer

    Actual competition would reduce prices;
    Reduced prices reduces profits;
    Reduced profits reduces campaign contributions.

    Can't let that happen, now can we?

    reply to this | link to this | view in chronology ]

    • icon
      Uriel-238 (profile), 6 Apr 2017 @ 4:50pm

      Re: The math is the answer

      Here in the US, Monopolies were supposed to be illegal, once. We broke up AT&T over a monopoly and threatened Microsoft over one. We've even broken up some power companies over monopolies.

      How do cable companies get by with so many regional monopolies?

      I assume its regulatory capture: they've gotten their own shills into office. Ajit Pai has behaved like a Comcast shill for years now.

      reply to this | link to this | view in chronology ]

  • icon
    Lady Gwyneth (profile), 6 Apr 2017 @ 8:31am

    You know you're system is screwed when an ISP was the good guy (lol) and got blocked from having to compete by the gov't.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonmylous, 6 Apr 2017 @ 1:46pm

    Ugh...

    And that's your weekly helping of Idjit Pie folks. The stupidity is free, but it will make you dumber if you eat too much!

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 6 Apr 2017 @ 2:37pm

    He says the broadband industry is competitive enoigh to not need privacy protections, while directly ensuring there's no competition in the broadband industry.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 6 Apr 2017 @ 8:51pm

    Things like this happen....

    ... just when you need a Dingo...

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 7 Apr 2017 @ 7:36am

    'Fixed'

    "My top priority is making sure that any American who wants high-speed Internet access has to get it from a premeier source. Today, we take another step toward ensuring the status quo remains unchallenged.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 7 Apr 2017 @ 10:24am

    Houses with no cable service?

    So now they're allowed to build out to 2 million houses that previously had no access to cable service, instead of 1 million with a competitor and 1 million additional. Does that matter? Are there really two million houses in their area that never had a coax cable run?

    reply to this | link to this | view in chronology ]


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